We are now looking for an impulse move lower in the pound, carrying it down toward 1.2200. But it could be worse as shown in the weekly (2nd chart below). Maybe our bearish view is too much in the consensus? That is the risk. Positioning here is negative, but not near extreme levels given the potential for a big move (third chart below).
The weekly view shows the potential for a push down to text the immediate post-Brexit lows back in October 2016 at 1.1450 in a Wave equality target (A=C) at 1.1576.
Net positioning British pound futures traded CME